Mumbai Property Tax Rises by 15% on Average; Flats Under 500 Sq Ft Remain Exempt

Image Source: Hindustan Times

BMC has raised property tax by 15% for the financial year 2025–26, which is the first revision in almost a decade. The increase comes due to the ready reckoner rate hike, which is used to estimate property values for taxation. Flats smaller than 500 sq ft are still exempt, following the respite provided in 2022.

1. Key Changes in Property Tax Structure

The rise is 15% on average, but in a few areas, the hikes are higher because of larger ready reckoner rates.
A flat owner who used to pay ₹50,000 a year as property tax now pays ₹57,500.
The previous revision had been done in 2015, but the planned 2020 increase was postponed because of the COVID-19 pandemic.

2. Exemptions and Relief Measures

Flats with less than 500 sq ft are exempted from paying property tax, a relief for more than 3.6 lakh dwelling units.
The 2022 move by the Maharashtra government to exempt small flats from property tax continues to benefit residents by saving them ₹460 crore every year.
The garbage tax rate suggestion of ₹100 to ₹7,500 has been postponed because of the increase in property tax.

3. Effect on Residents and Businesses

Some pockets, such as Andheri West and Bandra, have experienced above-average hikes, with the tax being increased by 23–26%.
The revenue target of the BMC is still at ₹5,200 crore despite the increase in tax.
Critics contend that the timing is inappropriate, with Mumbai continuing to face infrastructure issues.

4. Future Outlook and Policy Adjustments

The next revision of property tax will happen in 2030, as per the five-year cycle required by the Mumbai Municipal Corporation Act, 1888.
Authorities are keeping a watch on how the increase affects real estate purchases and housing affordability.

Sources: Hundustan Times, Times Now